Profit

Recurring Deposits (RD): These Three Banks Offer Interest Rates Up To 8.75%

Interest rates on recurring deposits of large banks like SBI are not as high as those offered by small finance banks

 Share
EMAIL
PRINT
COMMENTS
Recurring Deposits (RD): These Three Banks Offer Interest Rates Up To 8.75%

RDs or recurring deposits require customers to pay the instalments in regular payments


Recurring deposit (RD) accounts are popular among customers who want to build on their savings with regular deposits. Interest rates on recurring deposits are as compelling as those on fixed deposits (FDs). The only difference between the two forms of investments is that fixed deposits are a one-time investment, while recurring deposits require customers to pay the instalments in regular payments. Major banks such as State Bank of India (SBI) offer the option of opening recurring deposit accounts. However, the interest rates on recurring deposits of large banks like SBI are not as high as those offered by small finance banks such as AU Small Finance Bank, Equitas Small Finance Bank and Suryoday Bank.

What are small finance banks?

Small finance banks aim to provide banking and credit services in rural areas and interiors. They cater to small farmers, businessmen and other marginalised sections of the society, where mainstream banks have not penetrated as yet. Thus they provide financial inclusion to underbanked people.

For small finance banks, making customers invest on a continuous basis is a key challenge, say experts. "As digital penetration and use of handheld devices make customer acquisition easier for all even without having physical presence in the interiors, private sector banks are engaging microfinance companies as their business correspondences to mobilise low-cost deposit from rural catchments," said Rakesh Singh, retail head, SVC Bank.

Apart from these, small finance banks need to expand beyond their neighbourhood and break their regional barriers, he added.

However, interest rates on their savings accounts and fixed deposit accounts are lucrative and many a times even better than mainstream banks. Given below are interest rates on recurring deposits offered by AU Small Finance Bank, Equitas Small Finance Bank and Suryoday Bank:

BanksUp to 1 yearUp to 3 yearsUp to 5 years
AU Small Finance Bank7%7.25%8%
Equitas Small Finance Bank7.50%7.75%7%
Suryoday Bank8.50%8.75%7.75%

Post offices also offer the option of opening recurring deposit accounts.


Get Breaking news, live coverage, and Latest News from India and around the world on NDTV.com. Catch all the Live TV action on NDTV 24x7 and NDTV India. Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.

NDTV Beeps - your daily newsletter

................................ Advertisement ................................

................................ Advertisement ................................

................................ Advertisement ................................

Top